- EUR/GBP resumes gains after two days of correction.
- Price makes a high of 0.8688, the strongest level since June 15.
- Thursday: ECB decision and Truss energy plan.
The EUR/GBP resumes gains after a two-day correction. It recently rose to 0.8688, reaching the highest level since June 15. It is hovering around 0.8665, about to post the second highest daily close in 16 months.
Thursday could be a very volatile day for EUR/GBP with the European Central Bank meeting and UK energy plan. The ECB is expected to raise rates by 75 basis points and release macroeconomic forecasts. “The higher-than-expected August CPI readings certainly make the case for a more aggressive tightening and it seems that more and more Governing Council officials are leaning towards this outcome. Although the energy crisis adds another edge to the process , we think it’s too early for it to affect ECB policy at this point,” commented analysts at Brown Brother Harriman.
UK Prime Minister Liz Truss is expected to unveil her energy plans tomorrow as the pound remains under pressure. GBP/USD fell to the lowest levels in decades, near 1.1400.
With EUR/GBP trading around critical levels and taking the above developments into account, volatility will remain high. The cross is near 0.8700 and also near the 200-week SMA, currently at 0.8702. A firm break above 0.8720 should clear the way for more gains in the medium term. On the contrary, if the pound manages to hold that level, a recovery seems likely, especially if the cross falls below 0.8560.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
